Stryker Corporation

Welcome to the second quarter 2025 striker earnings call. My name is Megan and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Following the conference, we will conduct a question and answer session. This conference call is being recorded for replay purposes. Before we begin, I would like to remind you that the discussions during this conference call will include forward-looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent filings with the SEC. Also, the discussions will include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release that is an exhibit to Stryker's current report on Form 8-K filed today with the SEC. I will now turn the call over to Mr. Kevin Lobo, Chair and Chief Executive Officer. You may proceed, sir.

Welcome to Stryker's second quarter earnings call. Joining me today are Preston Wells, Stryker CFO, and Jason Beach, Vice President of Finance and Investor Relations. For today's call, I'll provide opening comments, followed by Jason, with the trends we saw during the quarter and some product updates. Preston will then provide additional details regarding our quarterly results and guidance before opening the call to Q&A. Our second quarter results reflect being in diverse and attractive end markets, our focus on innovation and disciplined operational execution. We delivered double-digit organic sales growth of 10.2% and adjusted EPS growth of 11.4%, while managing through the impacts of tariffs, Inari dilution, and the spinal implant divestiture. Our robust organic sales growth was driven by strong demand across our product portfolio and included double-digit growth from med-surgeon neurotechnology and high single-digit growth from orthopedics. Geographically, our U.S. organic sales growth of 11.5% included double-digit organic growth from our endoscopy, neurocranial, trauma extremities, and instruments businesses, and high single-digit organic growth in medical and HIPS. We delivered 6.5% organic international sales growth despite supply chain challenges with notable contributions from South Korea and emerging markets. We continue to view international markets as a big opportunity for future growth. As a growth company, we are excited to continue delivering innovation both internally and through M&A. We maintain a healthy deal pipeline and are well prepared to capitalize on a broad range of opportunities. We exited Q2 with strong momentum and are well positioned for the second half of the year. As a result, we are raising our full year 2025 outlook, which includes delivering another 100 basis points of adjusted operating margin expansion. We are confident in the durability of our growth and earnings power across our businesses.

With that, I will now turn the call over to Jason. Thanks, Kevin. My comments today will focus on providing an update on the current environment, capital demand, and the integration of Inari Medical. Procedural volumes remain healthy in the second quarter, driven by the continued adoption of robotic-assisted surgery, a stable pricing environment, favorable demographic trends, and the ongoing shift toward ASCs. We anticipate continued strength in procedural volumes as we move into the second half of the year. Demand for our capital products was strong once again in the quarter, and we exited Q2 with an elevated backlog. With healthy hospital CapEx budgets, we expect continued strength in our order book for the remainder of the year. We are also excited to share that during the quarter, we reached a milestone of 2 million robotic procedures performed with Mako. We are the clear leader in orthopedic robotics and continue to launch new applications such as revision hip which is receiving very positive surgeon feedback. Also, we delivered our best ever Q2 for Mako installations, both in the US and worldwide with high utilization rates across the globe. We expect sustained momentum from installations and utilization to continue to drive growth in our hips and knees businesses. The launches of Mako Spine and Shoulder are going well and remain on track for full launches as discussed on our last earnings call. Our platform launches such as LifePak 35 and the Pangea plating system continue to have success in the marketplace and are driving meaningful contributions to growth. We recently received approval for LifePak 35 in Europe and are on track to launch in late Q3. As a reminder, many of our new products are still pending approval in Europe, such as Insignia and Pangea. In addition to these launches over the past several quarters, we have introduced a number of next-generation and innovative products across our diverse businesses that continue to drive our growth. Lastly, we continue to make solid progress on the integration of Inari. We did experience some disruption in Q2, including working through destocking over the first half of the year, as well as the onboarding of new sales professionals. We have moved quickly to convert the business to our striker offense, which will position us well for the future. Even as we navigate these changes, we still expect double-digit pro forma revenue growth for 2025. With that, I will now turn the call over to Preston.